Thursday, August 20, 2009

Debt Management Plan

If you have a serious debt problem, you are not alone. Every year thousands of people contact credit counseling services seeking help about debt. The counselor will review your budget to determine the expenses you can cut, and will advise you about other steps you should take to get out of debt and to avoid bankruptcy. The counselor may suggest that you should participate in a debt management plan (DMP). Debt management programs can be effective in reducing consumer debt and helping them manage credit wisely. A credit counseling service can help you create and implement a formal and personalized debt management plan.

The counseling services contacts your creditors and asks them to reduce your interest rates and make other changes to help you. When you are participating in a debt management program, many creditors will agree to lower their interest rates and fees, or in some cases, eliminate them altogether. A debt management plan plan is an ongoing program that may take months to complete and usually requires participants to pay a monthly fee. After creditor have approved the plan, be sure that all payments you send as part of your debt management plan are sent to creditors in a timely manner.

2 comments:

A debt management plan is one option for breaking free of unsecured debts. You would work with a third party who would get in touch with your creditors and work out a plan for you to pay back the money you owed over a period of time, usually with reduced payments. Once you have gone into the deal creditors will not be on your back for payments and if you stick with the plan you will have become debt free once the term of the plan has been reached.

A Debt Management Plans plan is an ongoing program that may take months to complete and usually requires participants to pay a monthly fee. After creditor have approved the plan, be sure that all payments you send as part of your debt management plan are sent to creditors in a timely manner.